Nestlé USACome for the Opportunity. Stay for the People.

WE’RE LOOKING FOR THE VERY BEST!

ForOPERATIONS MANAGEMENT

DEVELOPMENT PROGRAM

Business: Operations, Industrial, Manufacturing, Production, food Industry and Supply Chain Management

Agriculture: Food Science, Food Processing, Food Manufacturing

Engineering: Industrial, Mechanical, Chemical, Electrical, Biosystems, and Agricultural Engineering*Applicants must be US citizens or permanent residents

Nestlé Information SessionThursday, Oct. 06 @ 6:00 p.m.-7:30 p.m.

MU 219 NavajoRefreshments and Snacks

Deadline for resume submission is 10/10/2005. All resumes must be submitted via the ASU Career Services

Website. Info Session for preselected applicants will take place on Monday October 17th, with interviews the following day.

Please contact your Office of Career Services for details on how to sign-up for interviews.

To learn more about Nestlé USA, please visit:

www.nestleusa.com

ASU – OMT – F05

RANKINGFORTUNE 500: NESTLE IS RANKED AS 48TH COMPANY

BEST GLOBAL BRANDS:NESCAFE IS PLACED AT 26TH RANKNESTLE FOODS IS PLACED AT 58TH RANK

HISTORY

• Nestle began in Switzerland in mid 1860s by HENRI NESTLE.• It’s first product was FARINE LACTEE

(“Cornflour Gruel” in French). It was a baby product.

• In 1874 the Nestle Co. was purchased by Jules Monnerat, enters the condensed milk market.

• In 1905 it merged with its biggest competitor Anglo-Swiss Condensed Milk company.

(cont’d)

• Nescafe was developed in 1930 and it became a main beverage for the American serving in Europe and Asia.

• Total sales increased by $125 million from 1938 to 1945.

• It expand it’s product line outside food market and acquire L’Oreal the cosmetic company in 1974. Presently it holds 26.4% share in the company.

MISSION

Nestle is dedicated to providing the best foods to people throughout their day,throughout their lives,throughout the world.With our

unique experience of anticipating consumers’ needs and creating solutions.Nestle

contributes to your well being and enhances your quality of life.

VISION

To be the leading food and beverage compay in the world providing customers with healthy

food at affordable prices.

PRODUCT LINE

• Coffee• Water and other

beverages• Dairy products• Ice cream• Infant nutrition

• Soups, seasonings, pasta, sauces.

• Refrigerated products• Chocolate,

confectionary goods and biscuits.

• Nestle professionals• Pet care.

COMPETITIVE ADVANTAGE

NESTLE

UNMATCHED PRODUCT PORTFOLIO

UNMATCHED R&D

UNMATCHED

GEOGRAPHIC PRESENCE

PEOPLE, CULTURE,VA

LUE AND ATTITUDE

SALES AND GROWTHPRODUCT CATEGORY SALES

(CHF BILLION)ORGANIC GROWTH

POWERED AND LIQUID BEVERAGES 18,885 12.8%

NESTLE WATERS 9,589 -1.6%

MILK PRODUCTS AND ICE CREAM 20,561 9.2%

NESTLE NUTRITION 10,375 7.7%

PREPARED DISHES AND COOKING AIDS 18,117 6.1%

CONFECTIONERY 12,370 8.0%

PET CARE 12,467 12.1%

PHARMACEUTICAL PRODUCTS 7,544 8.8%

OVERALL GROWTH RATE OF NESTLE IS 8.3%

GROWTH RATE OF VARIOUS BRANDS

NESTLE BABY

PRODUCTS

NESTLE GOOD START

Good Start Infant Formulas are specially designed to be easier to digest for baby's still-developing tummy because they're made with 100% partially hydrolyzed (broken down)

GERBER 1st FOOD• It is for babies who are 6+ months of age• Comes in fruit and vegetable flavors

GERBER GRADUATE LIL ENTREES• It is for babies between the age group of 12-36

months• Real vegetables, wholesome pastas, and tender

meats

GERBER GRADUATES SNAKES• It is for babies between the age group of 9-24

months• Real fruit and whole grains• A source of vitamins and minerals

• OTHER BRANDS

MARKET SHARE OF NESTLE

COUNTRY MARKET SHARE OF NESTLE AS A % OF TOTAL BABY FOOD MARKET

USA 12

CHINA 30

RUSSIA 16.3

INDIA 80

COMPETITORS

HEINZ: • It has a worldwide share of 17% in baby food.• Best Global Brand: 48th rank.

MEAD JOHNSON: (Acquired Bristol myers,squibb)

• Biggest competitor in US,Hong Kong• It has a market share of 52% in US

STRATEGY IN BABY FOOD MARKET

• Concentrate more on India GDP Growth: 7.09% Birth Rate:21/1000• Concentrate in US market.(Because of low share

market) Birth Rate:13/1000 • Capture the African,China and Hong Kong market.• Less focus on Japan and Romania as they have –ve

population growth.

NESCAFE

COFFEE PRODUCTION

SOLUBLE COFFEE VARIETIES

• Decaffe• Everyday Choice• Café Menu• Super premium• Dolco Gusto

Nescafe Cappuccino , skinny smooth, creamy flavour and rich, milky froth,Vanilla, Hazelnut or Caramel Cappuccino. Skinny(low fat alternative),foaming

Café Menu

Nescafe Classic The world's favourite coffee! You will find it in just about every country around the globe.

Every Day

Nescafé Dolce Gustomulti-coffee capsule system that will change the way you make, drink and think about coffee.

Premium

Nescafe Gold Blend golden roasted beans Arabica and robusta ,exquisite rich aroma , smooth coffee taste

Decaffe

Nescafe Green Blend Unroasted green coffee beans ,rich in polyphenol antioxidents, aroma fresh and smooth

Every day Choice

Nescafe original Rich blend of Arabica and robusta beans, Medium Dark Roasted , Non foaming

Every day choice

Nescafe Espresso 100% Arabican , fully roasted ,

Premium

Nescafe Frappe A Refreshing cold coffee , targeted at young adults

Premium

Nescafe Tasters choice Flavoured Coffee Only for US Market

Nescafe Alta rica All the dark-roasted qualities of Alta Rica without all the caffeine.

Premium

Powdered and Liquid Beverages had an excellent year, with organic growth of 12.8%

ZONES2007

IN MILLION CHF2008

IN MILLION CHF GROWTH RATE

Europe 6168 6254 22

America 4007 4115 12.4

Asia, Africa 5685 6019 35.1

Soluble Coffee 10371 10688 37.5

MULTI TIER STRATEGY

PPP Premurisation

Covers

Major segment of Population

EXPECTED GROWTH IN COFFEE MARKET

CRISIL Research (world wide)Per capita consumption CAGR of 3.5% between 2002 and 2007, Expected CAGR of 4.5% during 2008-2012.

COMPETITORS• China

Kraft(20% Market Share) President Coffee Co. ( joint venture between Starbucks and the

Taiwan based company Uni-President)90 outlets Blenz Coffee(Canadian chain) Shanghai Xing bake Nestle Has 46% Market Share Coffee Market Expected to grow by 70 % from 2008 to 2012.The popularity of instant coffee can also be attributable to its convenient

preparation. This appeals particularly to white-collar workers who have busy lifestyles

and cannot afford the time to prepare fresh coffee. Price-wise, fresh coffee is expensive when compared with instant coffee.

USANescafe has small Market SharePeople like Roast and ground flavour Competitors :• Folgers(J M Smucker Co.) (38% Market Share)• Maxwell coffee house(Krafts Food) (33% Market Share)• Superior Coffee, Douwe-Egberts (coffee)(Yuban and Sara Lee)(10% Market

Share)• Starbucks(5.6 billion in 2009) has major share• Mcdonald coffee (1.4 billion in 2009)Mexico-Nescafe Classico is the most trusted brand

UK• Starbucks Via Ready Brew(Recently launched in london)• Jacobs(Krafts food)• Folgers Instant Crystal

India • HUL Bru(44% Market Share)• Nestle (52.6%)

Australia• Australian instant coffee market is worth about $425M a year • Nescafe is the instant coffee market leader with around 70%

market share • Decaff coffees are more popular

BEVERAGE MARKET(Share of Different Products as a %age of sales)

37.50%

33.70%

28.80%

SOLUBLE COFFEEWATERSOTHERS

NESTLE CHOCOLATE

NESTLE PRODUCTS

• Aero• KitKat• Butterfinger• Crunch• Wonka• Smarties• Callier

Hershey Products

• Hershey, Pennsylvania, USA• Hershey’s cookies and creamy candy bar.• KitKat wafer bar.• Hershey’s kisses brand chocolate.• Hershey’s chocolate.• Hershey’s chocolate bar with almonds.• Hershey’s Mr.Good Bar chocolate bar.• Reese’s peanut buttercups.• Reese’s pieces candy.• Skor Toffee Bar.• Hershey’s special dark chocolate bar.

Kraft Foods

Northfield, Illinois, USA • Chocolate orange• Toblerone• Cote d’Or• All Gold• Daim

Chocolate Loving Nations

• Switzerland• Austria• Ireland• Germany• Norway

Differential Basis of Nestle

Variety of customers.Variety of products.

Global Market share of Chocolates & Confectionary

Nestle

Hershey

Kraft Foods

Others26%

20%

20%

34%

CONFECTIONERY MARKET(Share Of Different Products as a %age of sales)

79.20%

9.30%

11.50%

CHOCOLATE

SUGAR CON-FECTIONERY

BISCUITS

COMPETITIVE STRATEGY• Nestle nutrition• Aims to balance the sales between low risk but low growth

companies of the developed world and high risk and high risk markets of Africa and Latin America.

• In developed markets, foreign direct investments in big companies.

• In developing markets, nestle grows by manipulating ingredients & processing technologies according to local conditions and employ appropriate brand.

• Our alliance with coca-cola• New markets and new businesses for growth• Acquiring Indofood

Planning to acquire Kraft foods frozen pizza business

• Business in U.S & Canada for USD 3.7 billion cash.• Includes brands as Digiomo, Tombstone,

California Pizza kitchen, Jack’s & Delissio.• With total sales of 3 billion, Nestle will become

the fastest growing frozen pizza category.• This acquisition will increase our presence in

European Pizza market.• This will also enhance the EPS in the first full year

of its ownership.

NEW R & D CENTRE

• On 5th Jan 2010, we opened a R&D centre in Santiago, Chile.

• It focuses on biscuits and cereal based products.

• It will help in innovation & renovation of products.

Nestle to sell remaining Alcon shares to Novartis

• It sells 156,076,263 shares in Alcon.• It represents 52% of outstanding share capital.• It is for USD 28 billion in cash.• The transaction will be completed around in the middle

of 2010.• Steps of gradual divestment of ALCON: IPO of 23.25% in 2002. 24.8% in 2008.• This gradual divestment has insured that Nestle has

achieved full and fair value of its shareholders.

NEW PRODUCT

• LC 1, powder mixed with foods & beverages.• It has probiotic cultures in this product.• Offered in Japan & Germany in the form of

yogurt.• Not successful in European markets, UK and

France.• Focuses on health conscious people.• We used print ads, direct mailing campaign &

heavy internet advertising.

PROPOSED STRATEGY FOR LC 1

• Areas of food & beverage industry.• To educate the north American about the

benefits of probiotics.• Strong advertising & marketing campaign.• To gain maximum market share.• To reinvest all profits,

COMPETITORSNAME OF THE COMPANY

LOCATION CATEGORY LEVEL OF COMPETITION

Unilever Dutch company Packaged foods & products for home & personal care products.

International competitor

Kraft Foods U.S company Packaged food products

U.S based competitor

Hershey Foods U.S company Chocolate & sugar confectionary products

North America competitor

Groupe DANONE French company Packaged foods & beverages

International competitor

Cadbury Schweppes U.K company Confectionary & non alcoholic beverages

International competitor

SALES BY GEOGRAPHIC AREA BREAKDOWN

Sales

32%, Europe31%, america(26% from u.s)16%,Asia21%,rest of the world

SALES BY ACTIVITY BREAKDOWN

Sales

27%, drinks26%, dairy&food products18%, ready prepared&cooked dishes12%, chocolate11%, pet products6%, pharmaceutical productsbaby products

SIX principles for success

• Win all without fighting.• Avoid strength/attack weakness.• Deception& fore knowledge.• Shape your integration.• Speed and preparation.• Leadership, reinforcing success and starving

failure.

Recmmendations• Focus on BRIC Countries

•Population growthConsumption rate-0.55%•Coffee is increasing 15% every year•Present population is 1325 Million

China•Per Capita Coffee Consumption is 5.64kg •Population growth is .97%•Present Population is 191.97 Million•GDP growth rate-5.1%

Brazil

• Per Capita Consumption is 1.7kg • Present Population is 141.8 Million• Population growth rate is 0.21Russia

•Per Capita Consumption is 100gm•Population growth is 1.26%•GDP growth rate is 7.9%

India

FUNCTIONAL FOODS• Intentionally modified to provide health

benefits.• PricewaterhouseCoopers :Functional

foods will grow in value from $78 billion in 2007 to $128 billion in 2013.

• Incorporating healthier ingredients into its products .

• These ingredients include live bacteria in yogurt, extra calcium

• More easily absorbed by children’s bodies, and sterols (a kind of plant fat) that reduce blood cholesterol

Coffee

Pizza

BCG MATRIX

RELATIVE MARKET SHARE

MARKET GROWTH RATE

Chocolates